December 12, 2017

Fed Meeting This Week Could Change Interest rates

December 11th, 2017

Good Morning! From Allendale, Inc. with the early morning commentary for December 11, 2017.

Grain markets are weaker as traders prepare for the crop reports on Tuesday. Outside markets are focused on issues such as Bitcoin starting futures trading at the CBOE and the Fed meeting later this week.

World Weather Inc. says Brazil's weather is quite favorable for summer crops. Argentina's bottom line will be stressful for crops in parts of the nation this week, but showers will be around to slow the drying pace in some areas.

USDA Crop Report tomorrow morning at 11:00 AM CST has traders expecting nominal changes in 2017/18 US corn and soybeans stocks and slight declines in Argentina and Brazil's corn crops along with slightly higher Brazil soybean crop.

CONAB will update Brazil's corn and soybean crop production early Tuesday.

Ag Rural pegs Brazil's soybean crop at 112.9 mmt. vs. USDA's forecast of 108 mmt. They trimmed the Safrinha corn crop by 0.5 mmt to 19.7 mmt amid lower than intended planted area.

CFTC Commitments of Traders report showed managed money funds were net buyers of 36,244 contracts in corn and 21,472 contracts in soybeans. They were light sellers in wheat.

U.S. Economic markets this week will focus on the Tue/Wed FOMC meeting where the unanimous market expectation is for a +25 bp rate hike and ongoing negotiations among Republicans for the tax reform bill in the run-up to a likely vote next week on the bill. Traders will be dealing with whether there are any spill-over disruptions as bitcoin futures start trading today at the CBOE.

Baker Hughes says US oil rig count was up 2 rigs last week to 751.

February live cattle futures closed $3.67 lower for the week as weaker cash and product price started the slide. Technical and fund long liquidation has been a reason for late week pressure. Will fund liquidation continue?

February lean hogs were down $1.87 for the week. The Feb contract is caught in a range from 66.00 to 72.00.

Dressed beef values were higher with choice up .51 and select up 2.14. The CME Feeder Index is 154.40. Pork cutout value is up .52.

Technical Chart of the Day

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